Russia is reportedly considering the implementation of a gold-backed cryptocurrency, according to Russian news outlet Tass. Immutability and censorship-resistance are useful for governments in certain instances, such as conducting international trade in the face of sanctions. Russia and Iran previously considered using cryptocurrencies for business between the two. Iran later launched a gold-backed cryptocurrency.
Russian Central Bank Will Put Onerous Limits on Retail Crypto Investors https://t.co/Acax4U5ytX
— CCN.com (@CCNMarkets) March 12, 2019
Survey Says: Unlikely
Central banker Elvira Nabiullina was cold to the idea of government-backed crypto, saying that a settlement mechanism created in “national currencies” would be preferable.
“We are generally opposed to cryptocurrencies being launched into our monetary system. We do not see the possibility that cryptocurrencies could act as monetary surrogates. Definitely not in this part.”
Russia has been all over the place on the subject of cryptos. The signals from Moscow are confusing. A Russian economist was able to fool a number of western outlets into believing that the country was going to procure at least $10 billion in cryptocurrency with a series of false tweets.
Fake News: Why Russia is Probably Not Planning a $10 Billion Bitcoin Buy https://t.co/baMfGSpQ3d
— CCN.com (@CCNMarkets) January 14, 2019
Russia has considered bans on cryptocurrency, which the central bank seems to favor, and is also working on a regulatory framework that precludes normal people from acquiring and trading cryptos. Russia’s digital regulations are also in a state of flux, with a “digital iron curtain” – not unlike the Chinese “great firewall” – that would enable the country to essentially turn off the internet.
Last February, Vladimir Putin ordered work on a “CryptoRuble” which would help the country’s financial services subvert Western sanctions.
Russia’s Crypto Gambit
Russia is part of the Eurasian Economic Union, a smaller version of the European Union, whose member states include Armenia and former Soviet-bloc countries. EAEU Minister of Integration and Macroeconomics Tatyana Valovaya was more positive on the notion of using crypto to settle payments, at least between the member states. She said:
“We have prepared an analytical report and will present it soon, that will analyze what cryptocurrencies are, what is happening in the world, what approaches countries have, what regulation is provided. […] If the trend of cryptocurrencies and blockchain development is picking up pace, we have to realize that.”
At this point in the game, nearly every country has realized the potential of bitcoin and blockchain and has developed some plan to take advantage of or regulate them.
Iran uses its gold-backed cryptocurrency for international settlements. Several Middle Eastern nations also use decentralized ledgers to transact with each other.
Meanwhile, the petro, of course, was a spectacular failure, just like the rest of the Venezuelan economy over the past several years.
Highly developed economies like Sweden are working on national digital currencies as well.